One of North East Lincolnshire's leading charities has said it expects donations to drop if 1p and 2p coins are withdrawn from circulation.

The Government is looking at bringing the smallest denominations to an end amid concerns that they cost more than they contribute to society and are becoming increasingly irrelevant as people turn to digital payments.

The rarely seen £50 note is also under review.

But St Andrew's Hospice in Grimsby says small change is an important part of their public donations and says their withdrawal would impact on revenue.

The St Andrews Hospice in Grimsby (Image: Grimsby Telegraph)

Lesley Charlesworth-Browne, director of business development at St Andrew's Hospice: “Here at St Andrew’s Hospice, we are incredibly grateful for every donation and contribution received whether this is large or small and, we do receive a significant number of 1 and 2 pence coins, particularly through our collection boxes and bucket collections.

"We also receive coins from many donors who save their loose change and even pocket money for us over a period of time.

"It is likely therefore that the potential withdrawal of these small denominations would impact on the totality of donations received in this way although we are always very humbled by the ongoing generosity of our supporters who continue to give through a variety of other ways that will not be impacted by this change.

"We will watch developments on this proposal with interest, but for now: ‘every penny counts’.”

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The end of 1p and 2ps was signalled by Chancellor Philip Hammond, more than 45 years after they were introduced in the early 1970s.

In his spring budget, Mr Hammond launched a review questioning their future after the HM treasury revealed that 60 per cent of coppers are used just once before they are put in storage, such as piggy banks or - in 8 per cent of cases - simply thrown away.

As a result, the Royal Mint must issue 500 million coppers a year to keep them in circulation, but with the rise of digital payments it might be prudent to get rid of them completely.

The review also raises questions over the future of “rarely used” £50 notes which are often placed into “storage” too. The question being asked is does the current mix of eight coins and four notes meets people’s needs? If it doesn’t how should it change?

Many people save pennies up to give to charity (Image: Getty)

But MPs are also concerned phasing out such coins would hit charity buckets and Shadow Civil Society minister Steve Reed said the government must “think again”.

The Labour MP told the Mirror: “Cash is the most popular way for people to donate to charities, and much of that comes in small change like 1p and 2p coins.

“If the government goes ahead, it will directly hit the vulnerable people who rely on charities to feed, clothe, house and care for them.”

Digital technology has changed the way people shop, sell, and save says the Treasury. While cash will continue to be an important method of payment, more people are moving towards digital payments every year.

The call for evidence, which runs until June for firms and members of the public, pledges to ensure “the public’s legitimate cash needs continue to be met”. The rise of digital and contactless payments - which has left 11 per cent of people aged 25-34 rarely using cash - could have “profound implications for the most vulnerable”.

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The decline in cash purchases under £5 has been “much more significant” than in higher-value sales, hitting transport, pubs and restaurants, the document said. Furthermore Ex-Chancellor George Osborne reportedly came within weeks of scrapping the penny in late 2015 but was blocked by David Cameron.

British one pence coins (Image: Getty)

The Prime Minister’s official spokesman said: “I am told this is a call for evidence, intended to enable the Government to better understand the role of cash and digital payments in the new economy and that it is not proposing any specific policy changes.”